Standard and Poor’s cited OHSU’s significant improvement in its operating performance and its solid financial profile
November 8, 2010 -- Oregon Health & Science University has something to brag about. Standard and Poor’s, which issues credit ratings to public and private corporations based on their debt, increased OHSU’s score from BBB+ to an A.
“We soared right by the A-,” quipped OHSU’s president Joe Robertson, when the board met on November 1. An A grade indicates that an institution has strong financial and borrowing health.
Several other reasons were cited by Standard and Poor’s for the increasing rating -- among them OHSU’s “significant improvement” in its operating performance, its solid financial profile, the fact that it’s the only academic and medical center in Oregon, strong trends at the medical school, and its solid position as a Level 1 trauma center -- Pitt Calkin, interim chief financial officer, told the board.
There’s also the expectation, he said, that executive management will continue controlling costs and improving OHSU’s financial resources.
OHSU’s rating also increased because it’s being evaluated as a higher education system, not a health system. “Higher education is more consistent with the way other academic health centers are evaluated around the country. We didn’t fit the health system category, exactly,” said Tim Kringen, OHSU spokesperson.
“[The rating] has significant financial implications for OHSU,” said Board Chair Charles Wilhoite, adding that the new rating will lower OHSU’s interest rate on various debts incurred as well as impact future debts and bonds.
Meanwhile, OHSU’s financial audit for the 2010 fiscal year, which ended June 30, revealed that its total revenue reached $1.81 billion, which represented a $79.1 million increase over the previous year. The majority of its revenue, $1.05 billion, came from clinical care.
Significant increases in outpatient and inpatient care accounted for the majority of the revenue increase, with patient volume growing by 7.7 percent. Robertson also cited the high number of patents, patent applications, inventions, and commercialization agreements OHSU was involved with last year.
“We’ve had a very successful year in a tough economy,” Robertson said.
Wilhoite also shared the results of a survey taken by board members where they examined their own performance, the board’s performance, their relationship to OHSU staff and how the board could be more effective.
Currently no board member has a background in healthcare such as a physician, which was mentioned in the survey results. Finding such a person, independent from OHSU, is “a general comment I’ve seen over the years,” and the board needs to look at recruiting someone, Wilhoite said.